Next Steps for Native Ads: Get Scalable and Visible

What’s next for native ads? They should be clearly-marked as ads and available in publisher-defined formats, according to the co-founder of Celtra, a provider of mobile ad creation, serving and analysis.

Matevž Klanjšek, also chief product officer of the company, told CMSWire that any non-standard mobile ad formats, such as native ads, are “performing better than standard.” His assessment is based on his agency’s just-released quarterly Mobile Rich Media Ads Performance Report (registration required), which has been regularly issued over the past two years.

Standard Versus Native Ads

In the fourth quarter, the report found, 97 percent of mobile ads were in standard formats, which are expandable banner, banner and interstitial -- any ad with a banner or rectangular display. The other 3 percent were native.

But the native ads clearly outperformed the standards. Ad engagement rate was slightly more than 18 percent for natives, but only 9.5 percent for standards.

Interestingly, a third category called Rising Stars format – mobile ads that use cutting edge technology – had an ad engagement rate of 9.3 percent.

Click-through rates (CTR) are twice in natives (8.23 percent) what they are in standards (4.5 percent). Rising Stars are between the two. Video completion rate was 50 percent more in natives and Rising Stars than in standards.

Given that both native and Rising Stars ads are non-standard, Klanjšek’s point about mobile non-standards performing better is pretty evident. “The novelty factor is definitely involved,” he pointed out. According to the report, the top winning combo driving the stats is native or experimental Rising Stars ads with rich media, notably video.

From Celtra's report, "Mobile Rich Media Ads Performance"

Native Ads

Native ads are ones that use the style and focus of a specific publication or site, but the client’s content. Examples include Promoted Tweets on Twitter. They get more attention, in fact, by not standing out. But some have blended in so much – by not being clearly labeled in some way as an ad – that they’ve been attracting criticism along with clicks.

Klanjšek said that his company “believes ads should be ads and not content," and not deceive users. "Masking that it is an ad, he added, “deceives users.”

The other bump against native ads is that, by definition, they are custom made to resemble the surrounding publication or site. Custom made anything can be more expensive and time consuming.

Consequently, in spite of the clear performance difference, native ads are only a small part of Celtra’s business, according to Klanjšek. “They’re hard to do,” he noted, adding that “media agencies operate with tens or hundreds of publishers, and they can’t develop unique ads for each one.”

Because of that bottom-line fact, Klanjšek and his company are calling for standardization of native ads.

Standardization, Not Standard

In this case, “standardization” is most definitely not the standard ad format, which we can call instead “banner and rectangle.” Standardization here means that the publisher creates or at least defines the formats, the native-looking “container,” that ad agencies fill with text, images, animation or video, and interactivity.

Publishers could innovate on their own containers, with the help of agencies, Klajsek suggested. He noted that Celtra created a native ad format for Angry Birds, where birds fly in carrying a banner. “We used elements of the game” to bring in the message, he said, adding that Facebook and Twitter, which have created some “container” formats for native ads, are in a class by themselves.

It should be pointed out that the Celtra report still thinks “standard ad formats remain effective.” They have a nearly 10 percent engagement rate, boosted if video is involved.

But native and innovative mobile ads, especially with rich media, are the clear drivers of the report.

Pointing in particular at native ads, Klanjšek has said that “their overall performance and level of engagement with video and other rich media content offered through these formats is unprecedented.” The key challenge at this point: scalability, such as through publisher-initiated formats.